The Life Insurance Association of Malaysia (LIAM) wants the tax relief for medical and education insurance to be doubled to RM6,000, saying the current amount of RM3,000 is insufficient to cater to both healthcare and education.
According to LIAM, the cost of medical insurance alone for an average family, comprising two adults and three children, is around RM2,500 per annum at the lower end. This leaves only about RM500 per annum premium for savings towards the education of the three children in this typical family.
Meanwhile, LIAM also wants the current combined tax relief of RM6,000 for Employees Provident Fund (EPF) and life insurance be separated to encourage more Malaysians to purchase insurance and takaful policies.
The savings in EPF is to meet retirement needs, which is in the future. However, life insurance will meet the immediate needs of the family when the breadwinner passes away. Therefore, it would benefit the rakyat if they have RM6,000 tax relief for EPF contributions and another RM6,000 tax relief for life insurance or takaful premiums.
For the bottom 40% of households, LIAM proposes that the government provide a RM1 to RM1 match for the families to purchase micro insurance policies.
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